Paychex – PAYX – Reports Fiscal 2012 Results

Paychex, Inc. (NASDAQ:PAYX) reported total revenue of $2.2 billion for the fiscal year ended May 31, 2012, a 7% increase from $2.1 billion for the prior fiscal year ended May 31, 2011. Net income and diluted earnings per share each increased 6% to $548.0 million and $1.51 per share, respectively. The inclusion of SurePayroll, Inc. and ePlan Services, Inc. (“ePlan”), which were acquired in the second half of fiscal 2011, contributed approximately 2% in total revenue growth for fiscal 2012.

PAYX – Fiscal 2012 Highlights

• Total service revenue increased 7% to $2.2 billion.
• Payroll service revenue increased 5% to $1.5 billion.
• Human Resource Services revenue increased 13% to $676.2 million.
• Operating income increased 9% to $853.9 million and operating income, net of certain items, increased 10% to $810.3 million.
• Net income and diluted earnings per share each increased 6% to $548.0 million and $1.51 per share, respectively.
• Dividends paid to shareholders were $460.5 million, or 84% of net income.

Martin Mucci, President and Chief Executive Officer, commented, “We achieved solid results for fiscal 2012. Our organic client base, which had experienced declines for the last three years, ended fiscal 2012 flat compared to the prior year end. We reached a record level of service revenue, as checks per payroll improved for the ninth consecutive quarter, growing 2% for fiscal 2012, and payroll client retention reached near-record levels. Our operations execution excelled as we achieved our highest client satisfaction scores in our history, and our progress in technology innovation continued as we introduced our latest mobility offering to clients with our smartphone application.”

PAYX – Fourth Quarter Fiscal 2012 Highlights

The highlights for the three months ended May 31, 2012 (the “fourth quarter”) are as follows:

• Payroll service revenue increased 4% to $369.5 million. Organic growth in payroll service revenue was approximately 3% due to higher checks per payroll and revenue per check. Checks per payroll increased 1.9% for the fourth quarter.
• Human Resource Services revenue increased 12% to $171.2 million. Organic growth in Human Resource Services revenue was approximately 9%, attributable to favorable check volume, price increases, and  client growth.
• Total service revenue and total revenue increased 6% to $540.7 million and $551.5 million, respectively.
• Operating income increased 7% to $195.9 million, and operating income, net of certain items, increased 9% to $185.1 million.
• Our effective income tax rate was 37.6% for the fourth quarter, an increase over 35.5% for the fourth quarter of fiscal 2011 as a result of changes in our state apportionment.
• Net income increased 4% to $123.3 million and diluted earnings per share increased 3% to $0.34 per share.

About Paychex – PAYX

Paychex, Inc. (PAYX) is a leading provider of payroll, human resource, and benefits outsourcing solutions for small- to medium-sized businesses.

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Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.